Perquisites In Indian Tax System

A perquisite is any casual emolument, fee or profit attached to an office or position in addition to the salary or wages. In other words, perquisites are the benefits in addition to normal salary to which the employee has a right by virtue of his employment.

Definition of perquisite as per Section 17(2) of the Income-tax Act.

Section 17(2) of the Income-tax Act, 1961 gives an inclusive definition of perquisite. As per this Section perquisite includes.

The value of rent-free accommodation provided to the assessee by his employer.

The value of any concession in the matter of rent respecting any accommodation provided to the assessee by his employer.

The value of any benefit or amenity granted or provided free of cost or at concessional rate in any of the following cases.

By a company to an employee, who is a director thereof.

By a company to an employee being a person who has a substantial interest in the company.

By any employer to an employee whose income under the head 'Salaries' exceeds Rs.24000 excluding the value of non monetary benefits or amenities.

Any sum paid by the employer in respect of any obligation which, but for such payment, would have been payable by the assessee.

Any sum payable by the employer whether directly or through a fund, other than a recognised provident fund or EPF, to effect an assurance on the life of the assessee or to effect a contract for an annuity.

Note that benefits under sections 10(13A), 10(5), 10(14), 17 etc., continue to be exempt. It is only rule 3 has been amended.